MBSB Investment Bank Bhd (MBSB Research), CIMB Investment Bank Bhd (CIMB Securities) and Hong Leong Investment Bank Bhd (HLIB) all maintained their respective calls (NEUTRAL) on IGB REIT following its 1QFY26 results.
Analysts are highlighting strong earnings driven by festive spending, the full contribution from Mid Valley Southkey Mall and resilient rental performance across its portfolio.
MBSB Research maintained the call on IGB REIT with an unchanged target price of RM2.84, saying 1QFY26 core net income of RM168 million came in within expectations.
It noted earnings jumped 35% quarter on quarter and 51.9% year on year, driven by festive spending during Chinese New Year and Hari Raya Aidilfitri as well as contribution from the newly acquired Mid Valley Southkey Mall.
However, it expects earnings to normalise in the following quarter due to the absence of festive boosts. The research house said positive rental reversion and strong shopper traffic continue to support long term stability but kept a modest yield outlook of 4.6%.
CIMB Securities maintained the call on IGB REIT with a higher target price of RM3.06 from RM3.02, saying 1QFY26 core net profit of RM168 million was in line with expectations.
It highlighted that earnings were supported by higher rental income across Mid Valley Megamall, The Gardens Mall and the new Southkey asset which contributed 31% of revenue in the quarter.
CIMB added that full-year FY26 earnings growth of about 42% is expected, driven by the first full year contribution from Southkey Mall and steady rental reversions, although upside remains limited at current valuations.
HLIB maintained a HOLD rating with a higher target price of RM2.69 from RM2.43 after raising earnings forecasts. It said 1QFY26 core net profit of RM168 million beat expectations due to stronger than expected margins from Mid Valley Southkey.
The bank expects about 42% earnings growth in FY26 supported by full year contributions from Southkey and mid single digit rental reversion across the portfolio, although earnings per unit growth is seen closer to 20% due to a larger unit base.
All analysts agreed that while earnings momentum remains strong, especially from the Southkey acquisition, the stock is largely fairly valued after recent gains.
As of 10.20 am, the stock price increased 2.12% to RM2.89.
